As small business owners, keeping a steady cash flow can be incredibly stressful (especially in the last year and a half). So, over the past few weeks we have been discussing different ways to combat the stress and add passive income streams into the mix. If this is an option that you plan on pursuing, we strongly suggest that you weigh the pros and cons of passive income before venturing down this new path!
The Pros and Cons of Passive Income
Pro: You can earn money while you sleep.
When it comes to earning a passive income, the whole idea is to earn money without exuding a lot of effort. And as a result, a passive income can be a great way to pad a bank account and help alleviate stress around cashflow!
Con: It takes time to set up.
To set up a passive income stream, you will have to put in some unpaid work upfront! But the time and effort you put in at first will result in a return on investment later. You know… when you are making money while you sleep!
Pro: The Sky’s the Limit!
Realistically, in the beginning, the money will not come pouring in. You might start with a few hundred dollars each month (or every other month). But as time goes on, and as you begin to add additional passive income streams, the monthly income will grow. AND there is no cap to the earnings!
Con: It is NOT a Hail Mary!
The whole point of setting up passive income is to add padding to your bank account! So do not solely rely on it to pay your company’s rent or payroll (especially in the beginning)! Realistically, it takes time for passive income streams to get rolling. But once they do, it WILL help ease the burden of cashflow!
Con: You can’t just set it and forget it.
(Yes! We DID just place two cons next to each other… but we did this on purpose. Trust us!)
Yes, you CAN make money in your sleep, but this isn’t a self-perpetuating income stream! You do need to stoke the fire every so often, which is a clever way of saying “you need to promote it!”
Pro: Promotion will benefit your primary company, too!
When you promote your passive income stream, you are simultaneously promoting/marketing your main company! How? Well, anytime you mention the passive income stream to your followers/network (on social media, email marketing, or even in-person marketing) you are placing YOUR COMPANY at the top of their minds! So, you can basically kill two marketing birds with one stone!
Creating passive income streams can really help your company’s financial success! But it is really important to understand that it will take time to get rolling, requires some upfront heavy lifting, is not a Hail Mary, and will need some maintenance. So before you dive in, be sure to weigh out the pros and cons of passive income!